The benchmark S&P/ASX 200 Index rose 17 points, or 0.3 per cent, on Thursday to 5480.8, while the broader All Ordinaries Index also added 0.3 per cent to 5477.5. The market is trading at its highest level since June 2008.

Shares eclipsed 5500 points in early trade, while the dollar spiked above US94¢ after equity markets in the United States and around Europe pushed higher following the release of minutes from the US Federal Open Markets Committee reassured investors the central bank is in no rush to raise interest rates.

More economists are tipping the Reserve Bank of Australia's next move will be to raise interest rates than at any time in nearly two years. While the economy is showing signs of modest growth fund managers say share price valuations are tight.

"There is not a lot of scope left in the local market for capital appreciation over the year ahead, making high yielding stocks, such as the big four banks and Telstra, the most attractive play," Bell Asset Management chief investment officer Ned Bell said.

Banks take the lead

The big four banks led the market on Thursday. ANZ Banking Group rose for the eleventh session in a row, up 1 per cent to a record high of $34.19. Commonwealth Bank of Australia, Westpac Banking Corporation, and National Australia Bank each added 0.5 per cent to $77.89, $34.86, and $35.56 respectively. Telstra Corporation was unchanged at $5.08.

Food was the best performing sector as east coast grains handler GrainCorp climbed 1.1 per cent to $8.87 after the Australian Competition and Consumer Commission issued a draft decision that will increase its access to the Newcastle port. The biggest food retailers were also higher. Woolworths added 1.2 per cent to $36.35, while Wesfarmers, owner of Coles, rose 0.3 per cent to $42.81.

Miners lag

Resources was the worst-performing part of the market amid fears of declining demand for iron ore and coal exports following predictions for a decline in Chinese steel demand. Investors were unsettled as China's exports unexpectedly fell 18.1 per cent in February against expectations for a 6.8 per cent rise.

Resources giant BHP Billiton dropped 1.3 per cent to $37.91, while main rival Rio Tinto fell 0.3 per cent to $64.95 despite the spot price for iron ore, landed in China, rising for the fifth session in a row to seven week high of $US119.40 a tonne.

Baillieu Holst chariman Richard Morrow said the sell-off in mining stocks was an over-reaction. "China is not about to fall in a hole," he said.

Mount Gibson Iron was the worst-performing stock in the ASX 200 down 6.3 per cent at 82.5¢. The junior miner has lost 11 per cent in April despite the ore price rallying over the same period.

Energy stocks were also mostly lower as Brent crude oil dipped 0.4 per cent to $US107.60 a barrel. Origin Energy dropped 0.8 per cent to $14.46.

Mystery jump

Online travel booking service Wotif.com was the best-performing stock in the ASX 200, climbing 6.6 per cent to $2.73. Analysts said Wotif's jump was a mystery given the stronger dollar and the latest ABS travel statistics released earlier in the week showed domestic travel remains subdued.

Ten Network lifted 3.9 per cent to 27¢ as it posted an $8 million interim loss for the period ended February 28, narrowing a $243 million loss in the previous corresponding period and beating analyst expectations.

Tollroad operator Transurban Group lifted 1.1 per cent to $7.36 after showing toll revenue grew 12.9 per cent in the March quarter.

After surging 22.6 per cent in the previous session as the board recommended a new takeover offer, department store chain David Jones edged up another 0.5 per cent to $3.93 as investors digested a flood of mixed analyst reactions to the news.